Macau and Hong Kong will start negotiations on the Closer Economic Partnership Arrangement Agreement (CEPA) by the end of the year, the two governments announced last Friday. According to the Hong Kong Government press release, the key elements of the free trade agreement between the two Special Administrative Regions will include a commitment to bind tariffs at zero; minimising non-tariff barriers; and avoiding imposing trade remedies including anti-dumping – with safeguards, and countervailing measures as well as Customs facilitation procedures built in. Meanwhile, the Macau Government Spokesperson’s Office said in a press release that the city’s Economic Service Bureau (DSE) had already initiated the first stage of consultation for the agreement in August with government departments, related industries, local youth groups and academic organisation. ‘All of the opinions we had collected perceive the [CEPA] agreement will further strengthen the economic co-operation between the two cities, and will enhance the general competitiveness of the two Regions,’ the Office wrote. It also noted that the trade in services of the two cities still differed from each other in particular fields. ‘Hence, the Macau Government will continue to maintain close communication with local industry whilst cautiously boosting the related negotiation,’ the Spokesperson’s Office claimed. The two Special Administrative Regions have currently reached CEPA agreement with Mainland China separately. Official data published by DSE indicates the total export value of CEPA goods from Macau to the Mainland reached MOP70.52 million (US$8.82 million) between January and September this year. “After the establishment of the HK-Macau CEPA, the three places may build upon those CEPAs to establish a new, common platform to advance further liberalisation and facilitation of trade and investment in the ‘Greater China’ region,” the Hong Kong Government spokesperson said. According to Hong Kong’s official data, Macau was the 19th largest trading partner of Hong Kong in terms of goods in 2014. Bilateral trade in goods between the two economies jumped on average by 22 per cent per annum between 2010 and 2013, whilst bilateral trade in services posted an annual growth rate of 18 per cent between 2009 and 2013 on average. In addition, the city is the 11th largest source and recipient of foreign direct investment (FDI) into and from Hong Kong, according to the Hong Kong Government.
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